New Jersey Truth in Music Advertising Law Applies to Common Law Service Marks

Since 2004, Truth in Music Advertising statutes have been enacted in more than 26 states. These laws, aimed at preventing consumer confusion between a recording group and a performing group, set forth several conditions, at least one of which must be met to legally use the name of a music group in conjunction with a concert performance. In April 2009, the U.S. District Court for the District of New Jersey issued a ruling in a case that involved the constitutionality of that state's law, known as the Deceptive Practices in Musical Performances Statute, N.J.S.A. 2A:32B-1 et seq. (See the sidebar to this article below for more specifics of the statute.) The lawsuit against the state attorney general challenged the portion of the statute that authorized the owner of a federally registered service mark of a group name to permit a concert performance, but didn't give the same right to owners with rights in unregistered marks.

Rights Granted to Unregistered Marks

In its decision, the District of New Jersey granted the state's motion to dismiss, following an acknowledgement by the state that it would afford owners of unregistered marks the same rights under the Musical Performances Statute as owners of registered marks. Singer Management Consultants Inc. v. Milgram, 07-3929 (D.N.J. 2009).

In the suit, Singer Management Consultants had claimed the exclusive right to an unregistered mark for “The Elsbeary Hobbs Drifters.” Live Gold Operations claimed exclusive rights in unregistered marks for “The Platters” and “The Cornell Gunter Coasters.” Singer Management and Live Gold filed suit after New Jersey Attorney General Anne Milgram began investigating whether use of the group names at upcoming shows at the Atlantic City Hilton violated New Jersey's Truth in Music Advertising law. In August 2007, one day before the two-week gig at the Hilton was to begin, the district court issued a temporary restraining order against Milgram.

At the time, Jon “Bowzer” Bauman ' who had been a vocalist with the retro doo-wop group Sha Na Na and serves as chairman of the Vocal Group Hall of Fame's Truth in Music Committee ' explained to this author: “In Pennsylvania, which was the first state to pass the statute in its current form, the state attorney general went after two shows. That ended in a settlement as tribute shows. In New Jersey ' [t]he promoters sued the AG and obtained a TRO to let the shows go on, on the ground that the promoters would be damaged the most. It's now called a tribute, but they've had photos of their groups with links to the Rock and Roll Hall of Fame for the original groups.”

In September 2007, the district court held a hearing on the promoters' bid for a preliminary injunction. Singer Management and Live Gold argued that the statute's failure to recognize owners of unregistered marks violated the U.S. Constitution.

In its April 2009 ruling, the district court noted that at the preliminary injunction hearing: “The State agreed with this court's statement that 'the State's position is that once a holder of a common law trademark establishes its right to that trademark, they're in the same position as the holder of a registered trademark.' ' Because of the State's agreement on this point regarding the treatment of common law marks, this court found that the basic legal problems ' equal protection, First Amendment and due process ' were resolved. This court therefore vacated the temporary restraining order and did not grant a preliminary injunction.”

But the plaintiffs noted in their February 2009 memorandum of law to the court: “Now 18 months have passed and the Defendant still considers the matter under investigation.”

Milgram had argued in a January 2009 memorandum of law: “By their commencement of this action, Plaintiffs have interfered with the State's investigation of potential violations of the Truth in Music Act in connection with the Concert. To date, the State has expended significant resources to defend this action.” The memorandum continued: “The State has simply issued a Subpoena to a third party (the Hilton) to ascertain whether Plaintiffs were in violation of the Truth in Music Act. While the Hilton responded to that Subpoena by restricting its promotion of the Concert, that decision was not dictated by the State and thus is not subject to constitutional analysis.”

No Constitutional Issues

The district court observed, in granting the state's dismissal motion, that “both Plaintiffs and Defendants agree that there are no constitutional claims remaining in this matter. Plaintiffs allege that the only issue that remains open in this case is whether Plaintiffs can demonstrate that they use their respective marks under valid contracts. ' Not one of Plaintiffs' claims, however, is related to this matter. Each Count of the Plaintiffs' Complaint alleges a constitutional violation ' and there are no additional, non-constitutional violations alleged. Because the parties agree that all constitutional issues in this matter have been resolved, all Counts in the Complaint will be dismissed as moot.”

Singer Management and Live Gold requested attorney fees under 42 U.S.C. '1988(b), which states that a “court, in its discretion, may allow the prevailing party ' a reasonable attorney's fee as part of the costs.” But in December 2008, a federal magistrate had denied the plaintiffs' request by noting the shift in the state's position to recognize unregistered marks had been due to “perceived voluntary change in conduct” by the state “and not from a direct court order.” Upholding the magistrate's denial, the District of New Jersey noted in its April 2009 opinion: “While it may be true that this court's involvement aided in the resolution of the constitutional issues between the parties, the fact remains that the issues were not resolved as the result of a court order.”

The Singer Management Consultants decision appears to be the first ruling of its type. The Vocal Group Hall of Fame's “Bowzer” had said of the importance of the litigation: “The New Jersey action will be looked at by every other state.”

Selected Provisions of NJ's Deceptive Practices in
Musical Performances Statute

N.J.S.A. 2A:32B-2:

A person shall not advertise or conduct a live musical performance or production through the use of an affiliation, connection or association between the performing group and the recording group unless:

a. The performing group is the authorized registrant and owner of a federal service mark for the group registered in the United States Patent and Trademark Office; or
b. At least one member of the performing group was a member of the recording group and has a legal right by virtue of use or operation under the group name without having abandoned the name or affiliation of the group; or
c. The live musical performance or production is identified in all advertising and promotion as a salute or tribute; or
d. The advertising does not relate to a live musical performance or production taking place in this State; or
e. The performance or production is expressly authorized by the recording group.

N.J.S.A. 2A:32B-3(c):

A violation of the provisions of section 2 of this act shall also be an unlawful practice in violation of [the New Jersey Consumer Fraud Act, N.J.S.A. '56:8-1 et seq.], and subject the violator to all available State or private actions, remedies, damages, and penalties under that act, including, but not limited to, the Attorney General seeking and obtaining an injunction ' and the assessment of a civil penalty '.

Since 2004, Truth in Music Advertising statutes have been enacted in more than 26 states. These laws, aimed at preventing consumer confusion between a recording group and a performing group, set forth several conditions, at least one of which must be met to legally use the name of a music group in conjunction with a concert performance. In April 2009, the U.S. District Court for the District of New Jersey issued a ruling in a case that involved the constitutionality of that state's law, known as the Deceptive Practices in Musical Performances Statute, N.J.S.A. 2A:32B-1 et seq. (See the sidebar to this article below for more specifics of the statute.) The lawsuit against the state attorney general challenged the portion of the statute that authorized the owner of a federally registered service mark of a group name to permit a concert performance, but didn't give the same right to owners with rights in unregistered marks.

Rights Granted to Unregistered Marks

In its decision, the District of New Jersey granted the state's motion to dismiss, following an acknowledgement by the state that it would afford owners of unregistered marks the same rights under the Musical Performances Statute as owners of registered marks. Singer Management Consultants Inc. v. Milgram, 07-3929 (D.N.J. 2009).

In the suit, Singer Management Consultants had claimed the exclusive right to an unregistered mark for “The Elsbeary Hobbs Drifters.” Live Gold Operations claimed exclusive rights in unregistered marks for “The Platters” and “The Cornell Gunter Coasters.” Singer Management and Live Gold filed suit after New Jersey Attorney General Anne Milgram began investigating whether use of the group names at upcoming shows at the Atlantic City Hilton violated New Jersey's Truth in Music Advertising law. In August 2007, one day before the two-week gig at the Hilton was to begin, the district court issued a temporary restraining order against Milgram.

At the time, Jon “Bowzer” Bauman ' who had been a vocalist with the retro doo-wop group Sha Na Na and serves as chairman of the Vocal Group Hall of Fame's Truth in Music Committee ' explained to this author: “In Pennsylvania, which was the first state to pass the statute in its current form, the state attorney general went after two shows. That ended in a settlement as tribute shows. In New Jersey ' [t]he promoters sued the AG and obtained a TRO to let the shows go on, on the ground that the promoters would be damaged the most. It's now called a tribute, but they've had photos of their groups with links to the Rock and Roll Hall of Fame for the original groups.”

In September 2007, the district court held a hearing on the promoters' bid for a preliminary injunction. Singer Management and Live Gold argued that the statute's failure to recognize owners of unregistered marks violated the U.S. Constitution.

In its April 2009 ruling, the district court noted that at the preliminary injunction hearing: “The State agreed with this court's statement that 'the State's position is that once a holder of a common law trademark establishes its right to that trademark, they're in the same position as the holder of a registered trademark.' ' Because of the State's agreement on this point regarding the treatment of common law marks, this court found that the basic legal problems ' equal protection, First Amendment and due process ' were resolved. This court therefore vacated the temporary restraining order and did not grant a preliminary injunction.”

But the plaintiffs noted in their February 2009 memorandum of law to the court: “Now 18 months have passed and the Defendant still considers the matter under investigation.”

Milgram had argued in a January 2009 memorandum of law: “By their commencement of this action, Plaintiffs have interfered with the State's investigation of potential violations of the Truth in Music Act in connection with the Concert. To date, the State has expended significant resources to defend this action.” The memorandum continued: “The State has simply issued a Subpoena to a third party (the Hilton) to ascertain whether Plaintiffs were in violation of the Truth in Music Act. While the Hilton responded to that Subpoena by restricting its promotion of the Concert, that decision was not dictated by the State and thus is not subject to constitutional analysis.”

No Constitutional Issues

The district court observed, in granting the state's dismissal motion, that “both Plaintiffs and Defendants agree that there are no constitutional claims remaining in this matter. Plaintiffs allege that the only issue that remains open in this case is whether Plaintiffs can demonstrate that they use their respective marks under valid contracts. ' Not one of Plaintiffs' claims, however, is related to this matter. Each Count of the Plaintiffs' Complaint alleges a constitutional violation ' and there are no additional, non-constitutional violations alleged. Because the parties agree that all constitutional issues in this matter have been resolved, all Counts in the Complaint will be dismissed as moot.”

Singer Management and Live Gold requested attorney fees under 42 U.S.C. '1988(b), which states that a “court, in its discretion, may allow the prevailing party ' a reasonable attorney's fee as part of the costs.” But in December 2008, a federal magistrate had denied the plaintiffs' request by noting the shift in the state's position to recognize unregistered marks had been due to “perceived voluntary change in conduct” by the state “and not from a direct court order.” Upholding the magistrate's denial, the District of New Jersey noted in its April 2009 opinion: “While it may be true that this court's involvement aided in the resolution of the constitutional issues between the parties, the fact remains that the issues were not resolved as the result of a court order.”

The Singer Management Consultants decision appears to be the first ruling of its type. The Vocal Group Hall of Fame's “Bowzer” had said of the importance of the litigation: “The New Jersey action will be looked at by every other state.”

Selected Provisions of NJ's Deceptive Practices in
Musical Performances Statute

N.J.S.A. 2A:32B-2:

A person shall not advertise or conduct a live musical performance or production through the use of an affiliation, connection or association between the performing group and the recording group unless:

a. The performing group is the authorized registrant and owner of a federal service mark for the group registered in the United States Patent and Trademark Office; or
b. At least one member of the performing group was a member of the recording group and has a legal right by virtue of use or operation under the group name without having abandoned the name or affiliation of the group; or
c. The live musical performance or production is identified in all advertising and promotion as a salute or tribute; or
d. The advertising does not relate to a live musical performance or production taking place in this State; or
e. The performance or production is expressly authorized by the recording group.

N.J.S.A. 2A:32B-3(c):

A violation of the provisions of section 2 of this act shall also be an unlawful practice in violation of [the New Jersey Consumer Fraud Act, N.J.S.A. '56:8-1 et seq.], and subject the violator to all available State or private actions, remedies, damages, and penalties under that act, including, but not limited to, the Attorney General seeking and obtaining an injunction ' and the assessment of a civil penalty '.